Exhibit 4.9
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EMPLOYMENT AGREEMENT
This agreement is made as of the 5th of June 2001.
Between:
XX. XXXX XXXXX, 000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx, 00000
(the "Employee")
and
CARDIOME PHARMA CORP., a corporation incorporated under the laws
of the Province of British Columbia and having its registered
office at Xxxxx 0000, 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx X.X.
X0X 0X0
(the "Company")
WHEREAS:
A. The Company is engaged in pharmaceutical research and development (the
"Business");
B. The Company and the Employee previously entered into a preliminary
agreement dated January 4, 2001; and
C. The parties wish by this agreement to record the terms and conditions on
which the Employee has agreed to serve as Chief Scientific Officer for
the Company.
NOW THEREFORE in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as
follows:
1. Employment
Scope
1.1 Subject to the terms of this Agreement, the Company agrees to employ,
and the Employee agrees to serve the Company as Chief Scientific Officer
during the Term (hereinafter defined).
Term
1.2 The term of this Agreement (the "Term") shall commence on January 15,
2001 (the "Date of Commencement") and shall continue until this Agreement
is terminated in accordance with Part 4 or Part 5.2.
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Reporting
1.3 The Employee shall report and be directly responsible to the Company's
President and CEO.
Outside Directorships; Professional Development
1.4 The Employee will be permitted to maintain existing outside
directorships and also to engage in reasonable developmental activities
(as set out in Schedule "C"), in addition to the duties described below.
2. Compensation
Salary
2.1 The Company agrees to pay the Employee and the Employee agrees to accept
as remuneration for his services an annual salary in the amount of
US$190,000 in the first year payable by equal semi-monthly installments,
exclusive of any other benefits referred to herein. The salary will be
reviewed annually. "Annual salary" shall not include any other
compensation such as bonus, stock options or benefits.
Tax Allowance
2.2 The Company agrees to pay the Employee and the Employee agrees to accept
as tax allowance US$30,000 per annum to be drawn quarterly from a tax
escrow account.
Stock Options
2.3 Subject to receipt by the Company of shareholder and regulatory approval
on the Company's proposed new stock option plan (the "2001 Plan"), the
Company will grant the Employee an option to purchase up to 750,000 common
shares in the capital of the Company. The option exercise price will be
set using the Toronto Stock Exchange guidelines of the closing price
immediately preceding the date of grant. The Option will be vested as
follows:
i. 250,000 shares vested at the date of grant; and
ii. 500,000 shares vested upon achievement of specified milestones
(see Schedule "B"). These shares will be vested at a rate of 50,000
shares per milestone to a maximum of 500,000 shares.
Incentive Compensation
2.4 For the first two years of the Term, incentive compensation will be paid
to the Employee as follows:
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i. Stock option bonuses as outlined under section 2.3.ii above; and
ii. Cash bonuses will be paid at a rate of US$5,000 per achieved
milestone described on "Schedule B" (or as redefined in good faith
discussions following commencement of employment and following first
year of employment).
Thereafter, the Company will negotiate with the Employee in good faith
milestones upon the achievement of which options will be granted at a rate
of up to 50,000 shares per annum and cash bonuses will be paid at a rate
of up to 25% of base salary.
Benefits
2.5 The Employee may participate in all employee benefit programs maintained
by the Company, including any group disability insurance plan, medical and
dental plans, on the same terms and conditions as provided to other senior
officers of the Company.
Vacation
2.6 The Employee shall be entitled to four weeks vacation annually to be
scheduled when mutually agreed by the parties.
Expenses
2.7 The Company shall reimburse the Employee for all reasonable out of
pocket expenses actually, necessarily and properly incurred by him in the
normal discharge of his duties for the Company. Reimbursement shall be
paid against an itemized statement of expenses together with supporting
invoices where applicable.
Travel expenses prior to moving to Canada
2.8 The Company will reimburse the following expenses incurred by the
Employee during the period prior to the Employee's relocation to Canada
and in which the Employee is commuting to Canada from his US residence:
i) all medical and other insurance costs for the Employee and the
Employee's family during the this period; and
ii) 50% of the Employee's normal in-Canada living expenses; and
iii) 50% of travel costs in commuting between the Company's head office
in Canada and the Employee's current residence in US.
Relocation expenses
2.9 The Company will reimburse all expenses incurred at the time the
Employee elects to relocate to Canada, including the expenses of moving
personal possessions, real estate commissions and fees on the sale of the
Employee's California home, and the commission and fees on the Employee's
purchase of a new residence in association with this employment offer.
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3. Obligations of the Employee
Duties
3.1 The Employee shall perform such duties as are consistent with the job
description set out in Schedule "A" and shall perform, observe and
conform to such duties and instructions as from time to time are
reasonably assigned or communicated to him by the President and CEO.
Authority
3.2 The Employee is authorized, subject to the other provisions of this
Agreement to do all acts and things that the Employee in his discretion
deems necessary or desirable to carry out his duties provided that the
Employee will not make purchases or authorize work without the Company's
approval unless the expenditure has been authorized in a budget approved
by the President and CEO, or the expenditure arises in circumstances
which constitute an emergency requiring immediate action for the
protection of the Company.
Books and Records
3.3 The Employee will cause to be maintained accurate and complete books and
records of the Business, preserving all accounts, records, invoices,
receipts, vouchers, books, files and other documents in an orderly and
organized manner available for inspection at any time by any member of
the Board.
Access to Information
3.4 The Company will provide the Employee with all information and access to
documents and premises as are available and are requested by the Employee
to enable him to perform his duties.
Indemnity by the Company
3.5 The Company will indemnify the Employee against any and all claims,
losses, actions, lawsuits and other proceedings, judgements and awards,
and costs and expenses (including reasonable legal fees) arising by the
Employee carrying out his duties or authority, except those which arise
from fraudulent acts or omissions by the Employee. This indemnity shall
survive termination of this Agreement.
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Imported Intellectual Property
3.6 The Employee agrees that he will not use or bring to the Company any
technical information, data, trade secrets, processes, products,
formulae, investigations, or other intellectual property which is the
property of any other previous employer.
Ownership of Work Product
3.7 Any discoveries, ideas and suggestions, reports, documents, concepts,
products, inventions and improvements, technology, formulae and processes
together with the nature and results of research and development
activities, any marketing schemes, business, joint venture or marketing
contacts, or any business opportunities prepared, produced, developed or
acquired at the Employee's direction or by the Employee, whether or not
conceived or made during normal working hours and whether or not the
Employee is specifically instructed to make or develop the same
(collectively, the "Work Product") shall belong to the Company.
Disclosure
3.8 The Employee will disclose and transfer to the Company all Work Product
and execute and deliver to the Company all instruments or papers necessary
to perfect and enforce the exclusive ownership and enjoyment of the Work
Product by the Company in all countries.
4. Termination
By the Employee
4.1 The Employee may terminate this Agreement and his employment by giving
the Company 30 days written notice. Monies owed by the Employee to the
Company up to the date of termination shall then be paid by the Employee
to the Company.
By the Company
4.2 Subject to clause 1.2, the Company may terminate this Agreement and the
employment of the Employee summarily without notice or payment in lieu of
notice:
a. for cause that would, at common law, permit the Company to terminate
the Employee without notice. Examples of conduct which may constitute
"cause" include the following: willful breach or non-observance of
this Agreement in a matter of substance, negligent performance of
duties in a matter of substance, or insubordination in a matter of
substance; and
b. if the Employee files a voluntary petition in bankruptcy, or is
adjudicated bankrupt or insolvent, or files any petition or answer
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute or law relating to bankruptcy, insolvency or other
relief for debtors.
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Notice of Termination
4.3 The Company shall communicate termination by written Termination Advice.
"Termination Advice" means a notice which indicates the specific
termination of this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances to provide a basis for the
termination. No purported Termination shall be effective without a
Termination Advice.
Duties Upon Termination
4.4 If this employment is terminated, the Employee agrees to deliver to the
Company:
a. a final accounting, reflecting the balance of expenses incurred on
behalf of the Company as of the effective date of termination; and
b. all documents pertaining to the Company or this Agreement,
including but not limited to all books of account, records,
formulae and processes, correspondence and contracts which may be
in the Employee's possession or control.
Compensation on Termination
4.5 If the Company terminates the employment of the Employee without cause,
the Company shall pay to the Employee a severance amount (the "Severance
Amount"), at the rate in effect on the date of the Notice of Termination
equal to:
a. in the first twelve months of the Term, one month salary for each
month worked; and
b. if after the first twelve month period, one year of salary.
The severance amount shall be accepted by the Employee in full and
complete satisfaction of any claims to severance pay, pay in lieu of
notice or damages for dismissal, termination pay, any redundancy payment
to which the Employee may then be entitled, and any other compensation
or payment to which the Employee may be entitled pursuant to any claim
that he may have on the grounds of constructive, wrongful or unfair
dismissal or any other claim the Employee may have pursuant to any
statutory or common law provision, and shall be paid in full on the date
of termination. The Employee acknowledges, agrees, and accepts these
terms, as conditions of this Agreement.
The Employee may elect to have the Severance Amount paid to him in a
single lump sum which shall be paid within thirty (30) days of the
election.
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Mitigation
4.6 The Employee need not mitigate any payments provided in this Agreement
by seeking other employment or otherwise, nor shall the amount of any
payment created by this clause be reduced by any compensation earned by
the Employee through employment permitted by this Agreement with another
employer after the date of termination or otherwise.
Competition
4.7 The Employee agrees not to compete with the Company in any way for the
longer of:
a. The period in respect of which he is receiving compensation on
termination as set out in clause 4.5; or
b. Twelve (12) months following the date of termination of his
employment,
without the written consent of the Company. This means the Employee
will not individually or in partnership or conjunction with any other
person or persons, firm or corporation as employee, principal, officer,
agent, shareholder or in any other manner whatsoever directly or
indirectly carry on or be engaged or concerned with or interested in or
advise or act as consultant for, lend money to, guarantee the debts or
obligations of, or otherwise provide financial assistance for, or permit
his name to be used in any research or otherwise in competition with
the Company.
Solicitation
4.8 During employment and for a period of one year following termination of
the Agreement the Employee shall not hire or take away any employee of
the Company for the purposes of employment in any business related to
or competitive with the business of the Company.
Change of Control
Definition
5.1 Change of Control is defined under this Agreement as when:
i) there is an occurrence of an event whereby any person or entity
becomes the beneficial owner of shares representing 50% or more of
the combined voting power of the voting securities of the Company, or
ii) there is a merger or consolidation of the Company with one or more
corporations as a result of which, immediately following such merger
or consolidation, the shareholders of the Company as a group will
hold less than a majority of the outstanding capital stock of the
surviving corporation.
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Termination Arrangement
5.2 Upon a Change of Control of the Company, the Employee shall be deemed to
have been terminated, with the severance provisions defined under Section
5.3 hereof, provided the Employee remains available to the new entity,
if required by the new entity, for up to 3 months after the Change of
Control.
Compensation on Termination
5.3 The Company agrees to pay the Employee and the Employee agrees to accept
the following compensation package upon a Change of Control:
i. A cash compensation equivalent to one year of salary, payable on the
effective date of termination;
ii. 50% of the options subject to achievement of objectives not already
achieved, be vested immediately upon the Change of Control;
iii. The expiry date of all of the options outstanding shall be extended
for 5 years from the date of Change of Control irrespectable whether
the Employee stay in the new entity or not. The extension of expiry
date shall not exceed the maximum term allowed under the Company's
Stock Option Plan that options must be exercised no later than 10
years from the date of grant; and
iv. All coverage of medical and life insurance benefits, other than key
man insurance, for the Employee shall continue for the period defined
by the salary payment, or until they are employed elsewhere,
whichever is earlier.
The afore-mentioned compensation package shall be accepted by the Employee
in full and complete satisfaction of any claims to other severance pay,
termination pay, any redundancy payment or any other payment to which the
Employee may then be entitled pursuant to a Change of Control of the
Company, and any claim the Employee may have pursuant to any statutory or
common law provision, and shall be paid in full on the date of
termination. The Employee acknowledges, agrees, and accepts these terms,
as conditions of this Agreement.
Compensation for Continued Employment
5.4 Should the Employee elect to remain with the new entity on a permanent
basis, the Employee shall do so under terms negotiated between the new
entity and the Employee at that time.
Dispute Resolution
6.1 All questions or matters in dispute shall be resolved by mediation and,
if mediation is not successful within thirty (30) days, be finally
determined by arbitration using a single arbitrator following the rules of
the British Columbia Center for Commercial Arbitration.
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7. Miscellaneous
7.1 The laws of British Columbia and Canada shall govern this Agreement.
7.2 This Agreement is not assignable by either party.
7.3 This Agreement shall endure to the benefit of and be enforceable by the
Employee's legal representatives, executors, administrators, heirs, and
successors. If the Employee should die while any amounts are still
payable to him under this Agreement, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to his legal representatives, executors, administrators,
heirs, or, if there be no such designee, to the his estate.
7.4 This Agreement represents the entire agreement between the Employee and
the Company concerning the subject matter hereof and supersedes any
previous oral or written communications, representations, understandings
or agreements with the Company or any officer or agent thereof.
7.5 Notices shall be in writing and shall be sufficiently given and deemed to
have been received upon personal delivery or, if mailed, upon the first to
occur of actual receipt or forty-eight (48) hours after being mailed in
Canada, postage prepaid, registered or certified mail, return receipt
requested, addressed to the Company or the Employee at the address shown
on page one of this Agreement or at such other address as may be specified
in writing to the other party, but notice of a change of address shall be
effective only upon actual receipt. Notwithstanding the foregoing, if
there is an interruption in postal service, all notices shall be
personally delivered during the period of interruption.
7.6 Waiver by either party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach.
7.7 Time shall be of the essence.
7.8 Unless stated otherwise, all references herein to dollar amounts refer
to Canadian funds.
7.9 The recitals are an integral part of the Agreement and incorporated by
reference.
8. Agreement of Voluntary and Equitable
8.1 Each of the parties acknowledge and declare that they have carefully
reviewed and understand this Agreement including the Employee's rights
upon termination and the restrictions on the Employee after termination,
and acknowledge and agree that the terms are mutually fair and equitable.
Each party was fully and plainly instructed to obtain independent legal
and tax advice and each of them acknowledge that they have executed
voluntarily understanding the nature and effect of this Agreement after
receiving such advice.
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IN WITNESS WHEREOF the Company has caused it corporate seal to be affixed by and
in response of its duly authorized officers on that behalf and the Employee has
set his hand and seal as of the day and year first above written.
SIGNED, SEALED AND DELIVERED )
by the Employee in the presence of: )
)
/s/Xxxxxxxxx Xxx )
----------------------------------------)
Signature )
)
Xxxxxxxxx Xxx )
----------------------------------------)
Name ) /s/Xxxx X. Xxxxx
) --------------------
) EMPLOYEE'S SIGNATURE
0000 Xxxxxx Xxxxxx )
----------------------------------------)
Address )
Vancouver, BC )
----------------------------------------)
CARDIOME PHARMA INC. /s/Xxx Xxxxxx
--------------------
AUTHORIZED SIGNATORY
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Schedule "A"
Duties and Responsibilities of the Chief Scientific Officer of the Company
Services
The Employee is expected to be engaged full time in this position subject to the
outside directorships and professional development activities referred to in
clause 1.4.
The Employee's primary duties will relate to the supervision and guidance of the
Company's scientific operations and assistance in financing and business
development activities. The Employee shall select and evaluate the Company's
scientific operations and report to and advise the President and CEO concerning
same.
Specifically the Employee will:
1. direct executives in matters concerning the scientific research, clinical
development, regulatory affairs and intellectual property management of
the Company;
2. systematically monitor science related operating results;
3. evaluate and control the efficiency of scientific research, clinical
development, regulatory affairs and intellectual property management of
the Company;
4. evaluate and recommend strategic plans proposed by executives for
scientific research, clinical development, regulatory affairs and
intellectual property management of the Company;
5. establish and apply policies for human resources management in scientific
research, clinical development, regulatory affairs and intellectual
property management of the Company, within the context of the Company's
overall policy in this regard;
6. direct, manage and coordinate the Company's operational activities
according to the policies and objectives specified by the President & CEO,
and approved by the Board of directors;
7. assist the President and CEO in preparation of short-term and long-term
strategic plans for the Company;
8. assist the President and CEO in establishing policies and objectives
concerning the scientific operations, personnel, financial performance
and growth of the Company;
9. give general business and technical advice concerning the scientific
operations and long term planning, development and realization of
strategy development;
10. identify business development opportunities and lead or assist the
exploitation of such opportunities;
11. assist CEO or CFO as required in financing activities;
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12. lead or assist in identifying strategic partnership activities and
exploiting such activities in consultation with the CEO or his designate;
13. exercise all other powers and perform all other duties normally incident
to the office of the CSO, execute all documents required to implement his
duties as CSO of the Company, including but not limited to agreements,
requisitions, orders for the supply of equipment or services, reports,
etc. and exercise such other powers and perform such other duties as
from time to time may be assigned to him by the President and CEO and
the Board.
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Schedule "B"
Milestones 2001 - 2002
As contemplated in the Stock Option and Incentive Compensation clauses of this
Agreement the Employee shall receive options and compensation upon the
achievement of specific milestones.
Specific milestones for 2001 - 2002 are:
1. completion of Phase I clinical trial for RSD1235 by August 30, 2001
within budget;
2. initiate (1st dosage in patient) Phase II clinical trial for RSD1235 by
end of 2001;
3. validation of fungus based MTS program by end of 2001 within budget;
4. one new internally developed clinical candidates in the antiarrhythmic
program by the end of 2001;
5. completion (receipt of final report) of phase II clinical trial for
RSD1235 by June 30, 2002 within budget;
6. successful in-licensing deal for program in the cardiac area by the end
of 2001;
7. successful implementation of a new internal cardiac internal program by
the end of 2001;
8. at least one clinical candidate in the new (non antiarrhythmic) cardiac
program by the end of 2002;
9. two new research collaborations (university and/or corporate) - one by
the end of 2001 and the other by the end of 2002;
10. two new partnerships with pharmaceutical companies for the Company's
program (each of these partnerships will carry a minimum of US$30 million
of total upfront and milestone payments, and a royalty rate of 10% or
more).
The milestones here listed are subject to revision after commencement of
employment and development of specific strategic and operational plans which
shall guide the Company's activities.
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Schedule "C"
Outside Directorships and Professional Development
Existing outside directorships and professional developmental activities the
Employee may maintain shall include the following roles:
1. Director, Topigen Inc., Montreal, Canada;
2. Scientific Advisor and SAB Board Member, ConjuChem Inc. Montreal, Canada;
3. Scientific Advisor, Garmaise & Bissonet, Montreal, Canada;
4. Scientific Advisor (in non-cardiac areas), Aryx Therapeutics, Los Altos,
CA, USA;
5. Scientific Advisor, BDC, Montreal, Canada.
